Top 5 Best Gig Economy Stocks to Watch in 2022
The gig economy is thriving right now, which makes sense following the aftermath of the global pandemic. In actuality, gig economy stocks were finding their place even prior to the pandemic.
But has its momentum continued since 2020, and should you invest or trade in the gig economy going forward?
Read on to see our take on the top 5 best gig economy stocks to watch in 2022, and consider which ones (if any) to add to your portfolio.
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What are Gig Economy Stocks?
The gig economy refers to a new form of work that is characterized by the slow and steady replacement of traditional full-time jobs with temporary, freelance, or contract work.
What’s more, the gig economy can be seen in industries such as construction, hospitality, and computer programming. Many companies are increasingly using the gig economy to lower costs and increase profits.
The idea of the gig economy has been around for some time now. And there’s no doubt that it will continue to grow in the future. Given its growing popularity, it only makes sense to consider investing in its many jobs.
In this Shares article, we’re looking at the top 5 best gig economy stocks to watch in 2022, giving both the positives and negatives of each publicly traded company.
What does ‘gig’ mean in the economy?
The term gig economy refers to a broad workforce environment that includes contract jobs and short-term work. You can also call it “freelancer economy,” the “agile workforce,” the “sharing economy,” or the “independent workforce.”
In short, it’s any number of jobs, or gigs, that is generally handled on a freelance basis. The jobs are typically short-term but can last for longer periods.
Have you considered to either invest or trade in the gig economy? Were you aware of the concept of 'gig economy'? It's a fascinating and very progressive topic!
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What are the Top 5 Best Gig Economy Stocks to Watch in 2022?
Do you consider the gig economy to be a viable area to either trade or invest in?
Check out our top picks for the best gig economy stocks to watch.
Although the gig economy concept is somewhat new, these companies have already proven succeed past the IPO stage and thrive wherever possible on the public markets. Of course, results are never always all positive.
Let us review these top 5 gig economy stocks and you will be better able to make an informed decision in your trading and investing activity.
Everyone is more or less familiar with AirBNB and its online marketplace for homestays and even, now, tourism activity.
The company was valued at more than $30 billion upon their IPO in 2020 – Impressive, considering they don't even need to own any actual real estate in the business model.
They have been criticized for not being as transparent as they should be, but they have also been praised for their home-sharing platform that is making cities more liveable.
- AirBNB's annual revenue in 2021 hit $5.40 billion, up from $3.37 billion in 2020.
- Due to many people working remotely, there is more demand for AirBNB as people in general have more flexible schedules and location parameters.
- From 2017 up until 2020, AirBNB has seen increased net losses each year, which can show a potential downside to its long-term scenario.
With shares rebounding in recent weeks, AirBNB could be a worthy position for those looking to diversify within the gig economy sector.
Uber is a popular ridesharing company that connects people with drivers through an app.
Many people prefer Uber over taxi services, and because of that, the need for drivers is on the rise. It’s a great way to earn extra income on the side or full-time.
- According to Uber's statistics, annual revenue hit $18.3 billion in 2021, up from $11.1 billion in 202, and $14.1 billion in 2019; numbers show resilience in business model.
- Uber acquired alcohol delivery service, Drizly, in 2021, furthering its business in the Food & Beverage (FB) delivery sector.
- Uber has faced issues with controversial labour practices in the UK, which could put its long-term value in question.
Uber is certainly a prime example of the gig economy at work.
Would you consider Uber to be one of the top 5 gig economy stocks?
How many times have you had food delivered right to your door in the last month or year?
People are using apps like DoorDash to get anything they want delivered. But how can you tell whether or not this stock is worth the investment?
- As of January 2022, the 52-week range of DASH differentiates from $91.96 - 257.25, showing potential for short term trades (if these numbers continue to range based on this gap).
- Like Uber, DoorDash has faced controversy in its labour practices in the USA – Much of the delivery expenses can fall on the independent contractor, proving to be unsustainable.
- Overall, it is likely DASH is more suitable for short-term trading, opposed to a long-term growth stock.
DoorDash continues to be an interesting stock pick for diversified investors. As more people request the service, the more jobs the company is likely to fill – If they manage their labour practices properly.
Would you invest in DASH as a top gig economy stock?
Fiverr Inc (FVRR)
Fiverr is a platform known for providing cheap, quick, and reliable services online.
Promoting the gig economy via its platform with a starting price of only $5, is this company and hence its stock posed for both short and long-term growth?
- FVRR saw a strong finish in 2021, closing Q4 with $79.8 million in revenue, an increase of 43% year over year.
- With the freelance and hence gig economy a growing trend, there is no question that Fiverr’s userbase will grow throughout 2022.
- According to Zacks.com, Fiverr may be overvalued in current price, which would explain the ongoing volatility.
As the gig economy continues to develop and take shape, we will have a better understanding of the long-term potential for stocks like FVRR.
Do you think FVRR is a short-term trade, or suitable for long-term value as a top 5 best gig economy stock?
LYFT Inc (LYFT)
Lyft is a company that offers on-demand rides – a competitor to Uber.
Uber's competitor typically charges less than traditional taxi companies, becoming more popular in major cities across the country. As its popularity rises, should you invest in this gig economy stock?
- Lyft maintains a market share of 31% in the US by the end of 2021, a figure which is climbing according to Statista (and Uber’s US market share is decreasing).
- With a 52-week range of $33.94 - 68.28 as of January 2022, and a current price hovering around $40, Lyft could be a good Buy at this current price.
- Lyft is limited to serving North America only, which could stunt its potential for long-term growth.
Do you see Lyft as a top 5 gig economy stock to watch in 2022?
Are Gig Economy Stocks a Buy?
There’s no question that the gig economy sector will continue to rise in popularity, especially in light of the pandemic.
Individuals everywhere are seeking additional employment which allows them a more flexible lifestyle, and the gig economy is the ideal solution in many cases.
Given its ongoing dominance, it may be viable for both traders and investors to include gig economy stocks as part of either their short- or long-term portfolio.
If you’re interested in any of the listed top 5 gig economy stocks to watch, you can either trade or invest with Admirals by registering a live account.
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